Who knows? Maybe what's good for Wall Street will be good for Main Street once again.

It's at least a few years off, but a combination of circumstances could come together that would effectively prompt financial institutions to cover part or all the cost of new insulation and water heaters in your home.

"This is all market based," Golden said. "They will pay for retrofits from forward markets."

The operative concept at play here is forward capacity. Forward capacity, also known as permanent load shifting (PLS), is effectively a more static and predictable version of the demand response services now provided by companies like Comverge and EnerNoc. In the demand-response model, these companies curtail heaters and pool pumps to curb peak power consumption.

In forward capacity or PLS, energy efficiency repairs shift or eliminate peak demand permanently, or at least until someone removes the repairs. EPS, which makes energy efficiency equipment for food processors, says it has diverted 1.5 megawatts of power to off-peak times in Southern California, giving the utility some breathing room and shaving $232,000 a year off the utility bills of its industrial refrigeration customers.

While PLS can save homeowners money, the banks come in with the advent of carbon markets. Banks, conceivably, could package the energy savings from various projects and convert it into a security. Few people would want to buy a carbon certificate from a single home, but the energy savings from an entire subdivision, or 1,500 homes in a geographic region, would add up. "You could package 10 megawatts of savings," Golden said.

Expect more federal and state stimulus, too. A wide-ranging coalition that includes Home Depot, various unions and others is currently in Washington, D.C. trying to get Congress to divert $9.6 billion from the TARP program to fund the Home Star Initiative, which will underwrite retrofits and create construction jobs.

"It is a wide coalition and very bipartisan," he said. "No one is against our stuff, but the tough part is the 41 percent majority."

These companies will also likely monitor how well their retrofits hold up under ongoing performance-based contracts. With ongoing monitoring, anyone buying or selling carbon credits based around retrofits will, ideally, be able to more accurately value a credit's price over time. More importantly, consumers would be able to obtain refunds or discounts under service-level agreements with the retrofitter covering savings and comfort. Suddenly, with a service-level agreement in place, ongoing monitoring is transformed from being an invasion of privacy ("Big Brother is Watching Your Thermostat") to a way to eke more discounts out of your monthly utility bill.

Measuring the carbon abatement of acres of forest still involves guesswork. Both forests and the rules protecting them can change over time. The amorphous nature of carbon credits has also been blamed for fluctuating prices.

Early experience tends to indicate that carbon traders actually understand and like carbon abatement projects. The percentage of carbon certificates achieved through the Regional Greenhouse Gas Initiative (RGGI) that are based around energy-efficiency projects already exceeds expectations, Golden claimed. (We're following up on this.)

You could even add a "Buy American" angle if you want: to get carbon credits, you can help preserve a coral reef, or homes in Youngstown, Ohio. Although national unemployment has dropped below the ten percent mark, unemployment in construction rose from 18.7 percent last October to 24.7 percent in recent months, said Golden. Another added jobs bonus: the vast majority of building materials consumed in the construction industry are produced domestically, so retrofits would boost factory jobs, as well.

What's missing? First, some form of carbon taxation would have to pass. Second, utilities will have to deploy smart meters for better monitoring. While the first prerequisite may be stuck at the federal level for now, the smart meters are already rolling out.

Third, more accurate data will be required. Energy-efficiency retrofits have only really started taking off in the last few years. The savings from retrofits right now are largely extrapolated from computerized simulations, not real-world experience. Early data indicates that geography, local weather patterns and consumer behavior can all cause variations between what the simulation predicts and what actually occurs. The models from the National Renewable Energy Labs, for instance, tend to be more accurate when it comes to estimating the gains from retrofits in cold states like New York than retrofits in temperate California, where forgetting about thermostat settings is more common.

"When we have the data from 1,000 homes, it is a matter of convincing the market," Golden said.